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Kurdistan Oil fields


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#1 riggerbeautz

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Posted 26 June 2009 - 07:49 PM

Most of this year i've played several stocks exploring in KRG approved areas. All to a lesser or greater extent were considered as speculative high risk plays. But slowly the story has emerged from the tipsheets and bulletin boards to the main stream press with the likes of Heritage(Hoil/Hoc) finds/takeover story and Addax being recently courted.

The general awareness of the KRG and Iraqi paliament struggling for control of areas such as Kirkuk, spiced up by feuding oil ministries, the story and plot is quite fascinating.

Then having noticed this piece recently mentioning several of the main players and prospects of the directly linked quoted propects; thought it time to flag up the story en bloc.

QUOTE
The Kurdistan region of Iraq is a geological extension of the world’s richest petroleum fairway, which extends from Saudi Arabia to Syria. It is estimated to have around 45 billion barrels of oil reserves making it sixth largest in the world, mostly recently discovered (even excluding Kirkuk and Mosul which are essentially controlled by the federal government). Due to geo-political conflicts, the resources in Kurdistan have been essentially untapped. Upon the overthrow of Saddam Hussein’s regime in Iraq, however, Kurdistan began to open itself to foreign investment (the tapping of the Kurdistan keg). Currently about 25 companies have been granted the Profits Sharing Contracts (PSC) from the Kurdistan Regional Government (KRG). Some of the publicly traded companies are listed below.

Chart 1 PSC Blocks in Kurdistan



Source: WZR company presentation.

Companies that have made discoveries and/or are producing

Addax Petroleum Corporation (ADXTF.PK): Addax has a 45% working interest in Taq Taq, a currently producing oil field, and another 26.67% interest in the Sangaw North PSC. Starting June 1st, 2009, Addax began exporting oil from Taq Taq, a historic event for Kurdistan.
DNO: DNO entered into a PSC with the KRG as early as 2004. It has a 55% working interest in the producing Tawke field. Just like Addax, DNO was also granted permission to export oil from its Kurdistan oilfield.
Heritage Oil (HTGLF.PK): The company announced a major oil discovery in early May 2009 with an estimated oil-in-place of 2.3-4.2 billion barrels.

Pre-production: Large International E&P Companies

Talisman Energy (TLM)
Niko Resources (NKRSF.PK)
OMV Aktiengesellschaft (OMVKY.PK)
MOL Magyar Olaj-es Gazipari NyRt (MGYOY.PK)
TNK-BP (TNBP, listed in Russia)
Reliance Industries (500325, listed in India)

Pre-production: Junior E&P Companies

Gulf Keystone (GKP LN or GUKYF)
Sterling Energy (SEY LN)
HKN Inc. (HKN)
WesternZagros (WZR CN or WZGRF)
Vast Exploration (VST CN or VSTFF)

Investment Theme I: M&A

M&A activities involving Kurdistan-related E&P companies have been heating up over the past several weeks. After a rumored bidding war among Chinese, Korean and Indian companies, Addax was acquired by Sinopec (SHI) on June 13th with a price tag of around $8.5 billion (including debt), implying a $6.3/boe or CAD 7.3/boe (3P). On June 9th, Heritage Oil announced its acquisition of Turkish oil company Genel for $5.5 billion. Genel is the working partner of both Addax and DNO in Kurdistan. Last time we heard any meaningful M&A news about Kurdistan assets was back in 2Q07 when DNO received and subsequently rejected an unsolicited offer ($700 million) for its Kurdistan assets from an unidentified international oil company. Based on DNO’s reserve data as of 2Q07, the offer represented a valuation of $7.3/boe or CAD 8.3/boe (3P).


The biggest X factor in Kurdistan is actually China. Recently, China has been very vocal regarding its concerns of the safety of the US dollar and its holdings of US treasuries. There are a lot of signs that China is channeling its gigantic foreign currency reserves into commodities through overseas acquisitions.

China has a decent track record of acquiring assets in South America, Africa and the Middle East where political sensitivity is less of a barrier than in the developed countries such as Australia. Additionally, after China was outmaneuvered and walked away from Rio Tinto (RTP) deal, China was left with a $19 billion additional war chest for overseas acquisitions (assuming the money is still earmarked for the original purpose). China is no stranger to Iraqi oilfields: China National Petroleum Company (CHNR) set its foot on Iraq in 1997 and has just signed a development service contract of Al-Ahdab oilfield. Kurdistan oil assets could be an ideal target for China though it has shied away from them to avoid offending Baghdad. Sinopec’s aquisition of Addax provides anecdotal evidence of a possible strategy shift. Besides Addax, Niko Resources could also make an ideal acquisition target for Chinese oil companies. NKO has a market cap of CAD 3.8 billion, large enough to be on China’s radar screen, and a portfolio of assets primarily located in the developing countries where China seems to have a diplomatic edge.


Investment Theme II: Kurdistan Pure Plays

There are only two Kurdistan pure plays in the Kurdistan universe: WesternZagros and its “mini” neighbor Vast Exploration. They share many of the same attractive investment characteristics.


Highly attractive risk/reward profile. We believe that the fair value of WZR (click here for valuation details) is conservatively about C$3.60, or roughly 2.5X its current price. There are many cheap lottery tickets in the E&P universe, but what makes this one unique is its high likelihood of success. It is hard to make a forecast of VST’s NAV due to the earlier stage in its exploration efforts. However, NKO, one of the larger E&P companies in Canada with a market cap of CAD 3.6 billion, is not only VST’s business partner (36% working interest) in the PSC block, but also VST’s largest shareholder (17% ownership). Combining both, NKO’s actual working interest in the block is over 42% (36%+36%*17%). Therefore, buying VST stock is essentially buying a call option on NKO’s Kurdistan business or the eventual consolidation into NKO.


High scarcity value. Kurdistan holds one of the world’s most coveted oil fields, which up until recently was off limits, protected from foreign ownership. WZR and VST were among the first movers, and because they took large risks as foreign investors at such an early stage, their potential reward is sky high.


Kurdistan is actually safe. Kurdistan is no tropical island for the long distance traveler, but it is arguably a true “security oasis” within the war-battered Iraq, and it is ranked “secure” by the US military. Over 20 E&P companies have been operating in the region over the past several years with no major interruptions, which makes this a safe haven among prospective untapped oil reservoirs. Click here for detailed blog on geo-political issues in Kurdistan region.


“Elephant” potential. An “elephant” oil field is one whose recoverable reserves are at least 100 million barrels. According to the well respected oil and gas consultancy Sproule and Associates, as of March 31, 2009, WZR’s exploration block has P90 prospective resources of 1.6 billion barrels. P90, for those unfamiliar with the industry jargon, refers to reserves that have a 90% certainty of actually being produced. WZR’s find, if “proved” would count among the 100 largest producing oil fields in the world. VST’s block is bordering both the WesternZagros block and the Heritage Oil block, which are considered among the 2 most promising blocks in Kurdistan (and in the world for that matter). Heritage Oil announced a major oil discovery in its Miran West-1 well early May with estimated oil-in-place of between 2.3 to 4.2 billion barrels. In early February 2009, VST started a seismic acquisition program for a minimum of 350 km of 2D seismic data. The process will take 4-5 months, and at its conclusion, VST will be able to generate an initial reserve estimate for its block – this creates potentially very market moving news flow this summer.


Terrific takeout potential. WZR, although well capitalized for a “junior” oil exploration company, with $130 million in cash and no debt, is extremely unlikely to remain independent long term. Its exploration partner, Talisman Energy, with $8 billion of revenue and a $16 billion market cap, is better suited to take on this elephant, and may wish to increase its stake by acquiring WZR itself. Other large oil companies who either have been waiting on the sidelines due to lack of a clear regulatory framework or who already have small stakes, are undoubtedly eying WZR’s prized oil fields hungrily. NKO is VST’s exploration partner and its largest shareholder. The likelihood that NKO eventually acquires VST in whole is arguably quite high, which provides another very direct catalyst.



http://seekingalpha....eted-oil-fields

Will add more research shortly, personally hold Heritage(as it's ISA-ble) and WZR, whilst traded GKP, LFD and VST smile.gif
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#2 riggerbeautz

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Posted 26 June 2009 - 07:56 PM

What governs how these companies operate in Kurdistan? The Kurdistan Oil and Gas Law of course, so where better to explore the story so far than their own website.

http://www.krg.org/a...g...8&anr=18695

QUOTE
The Kurdistan Oil and Gas Law was approved by the Kurdistan National Assembly, the Region’s parliament, on 6 August 2007. This link provides Arabic and English versions of the law, as well as a model production sharing contract:
Kurdistan Oil & Gas Law in English and Arabic, and model production sharing contract

The KRG and the federal government in Baghdad agreed that the February 2007 draft federal oil and gas law will be the basis for a future law. The draft law is available in English and Arabic:
KRG publishes draft Federal Oil and Gas Law of Iraq in English and Arabic

The KRG and the federal government in Baghdad agreed a draft revenue sharing law for Iraq in June 2007. The draft law is available in English and Arabic: Draft Iraq revenue sharing law

Dr Ashti Hawrami, the KRG Minister for Natural Resources, discussed the draft revenue sharing law and hydrocarbons policies of the KRG and the federal government at a UN hydrocarbons conference in April 2009.

In May 2009 OMV and MOL announced investments to access natural gas from the Kurdistan Region for local supply and export throught the Nabucco pipeline.

KRG oil and gas contracts

The KRG has signed oil & gas production sharing contracts under the Iraqi Constitution and the Kurdistan Oil and Gas Law. Please see:

29 Jul 08: KRG announces 461 million square foot site for Kurdistan Gas City

25 Jun 08: KRG and Korea National Oil Corporation sign new petroleum contracts

23 Jun 08: KRG signs petroleum contracts with Talisman Energy

12 Nov 07: KRG signs five more petroleum contracts

6 Nov 07: Ministry of Natural Resources announces seven new petroleum contracts for Kurdistan Region, reviews five existing contracts

2 Oct 07: KRG Natural Resources Ministry announces new Kurdistan Region petroleum contracts

8 Sep 07: KRG signs oil and gas contract with US-based Hunt Oil and Impulse Energy Corporation (IEC)

26 Feb 07: KRG supports draft Federal Oil Law. Five pre-2005 contracts under review

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#3 riggerbeautz

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Posted 27 June 2009 - 11:23 AM

From the early days of post conflict, the KRG have made better progress, bringing in smaller companies on PSC's than their counterparts in Baghdad.

Everyone knows the story is complicated and this article sums up with an overview of some of the challenges that were faced at the outset and why Kirkuk is so sought after.

http://www.crisisgro...dex.cfm?id=4782

The KRG ploughed their furrow diligently, with the help of Washington. But not without controvesy.

The first PSC went to Hunt Oil a privately owned independant oil company, but it gives some idea as to why American companies have been rather quiet in the area since.

As reported at the time

QUOTE
"We're very pleased to have the opportunity to be a part of these landmark events by actively participating in the establishment of the petroleum industry," Ray L. Hunt, Hunt's CEO, said in a statement.

Hunt, who is also on the board of Halliburton, has been a key fundraiser for President George W. Bush, who named him to the President's Foreign Intelligence Advisory Board. wink.gif

Revenue will be shared by the KRG throughout Iraq, consistent with the Iraq constitution and the Kurds' new petroleum law, issued by the Kurdistan National Assembly early last month.

Despite Iraq's vast oil reserves, major international companies have sat on the sidelines, not only for security reasons but because of the absence of legislation governing the industry and offering protection for investments.

A draft oil law for all of Iraq has been bogged down for months, in part because of disputes over who will control the proceeds.

In August, however, the Kurdish self-governing region in northern Iraq enacted its own law governing foreign oil investments. The move angered the central government in Baghdad, but the Kurds are determined to push ahead with oil exploration.


http://www.cbsnews.c...in3244774.shtml

See the story of how events unfolded from Hunt Oil.

http://www.huntoil.com/barzani.asp

QUOTE
This August, the Kurdistan Regional Government (KRG) of Iraq passed an oil and gas law to regulate the oil sector in our region. So far, we have signed eight production-sharing contracts with international oil and gas companies. We expect to sign another two in the near future.

We were deeply disappointed by the negative reaction of several officials in Baghdad to these contracts. In the last several months it has become clear to us that many in the Iraqi Oil Ministry are locked in a time warp dating back to the regime of Saddam Hussein, in which Baghdad holds tight control of all the resources of Iraq and uses these resources to create obeisance and loyalty to the center.

The KRG production sharing contracts are fully consistent with the Iraqi Constitution, which gives the regions of Iraq substantial control over natural resources. The contracts are also fully consistent with the draft Iraqi oil law that was agreed to this March, but has yet to be passed by the Iraqi National Assembly. The Kurdistan region's oil law, passed in August by our parliament, is 100% faithful to the agreed draft of the Iraqi law, and includes provisions for the KRG to share its oil revenue with the rest of Iraq in the same 83%-17% ratio. If we had intended to "go it alone," why would we ever consider passing a law which requires us to give 83% of the revenues to the rest of Iraq? We waited five months for the Iraqi Assembly to pass the agreed draft -- they have not acted, and there is no sign that they will act anytime soon. We decided to "lead from the front."

The Bush administration and Congress have been pressing the government in Baghdad to move ahead on a fair, transparent and efficient oil law. So have we. Neither of us have had any success. Thus, we have chosen to pass in our own assembly the very same law that was agreed to by all parties in March of this year.

We hope our friends and supporters in the U.S. will understand that this is not an attempt to usurp the nation's oil resources, but rather our best effort to move the process forward, leading by example to make these valuable resources work for the people of Iraq. The resources that can ease the suffering of the people of Iraq lie beneath our feet............

The answer is found in the principles of the Iraqi Constitution, the U.S. Constitution and many others around the world -- federalism. This is not just a concept to us. Federalism means that we have the liberty to develop our resources under the umbrella, but not the central control, of Iraq. It means that as 17% of the population we will receive 17% of the wealth, and that we will accordingly share 83% of our wealth with the rest of the population.

We want peace and prosperity for the rest of Iraq as well. We will contribute our fair share and more to that goal. But we cannot be asked to sit by and postpone our aspirations for prosperity in pursuit of a vision of a centralized Iraq that long ago passed from reality. We are trying to lead by example in all that we do. Our oil law, and the contracts we have signed, are nothing more than that.


What followed were demands for an enquiry and allegations the U.S played a shifty hand at an early stage.

QUOTE
Democratic lawmakers moved Monday toward investigating Hunt Oil's oil exploration contract in Iraq, saying the company's ties to President Bush raised questions about whether it had insider information that helped it reach the deal.

U.S. Rep. Henry Waxman, chairman of the House Oversight and Government Reform Committee, and U.S. Rep. Dennis Kucinich, D-Ohio, asked Hunt to turn over all Iraq-related communication with the U.S. government by Nov. 2.

The lawmakers also demanded that Ray Hunt, Hunt Oil's chief executive, submit copies of information he may have received about Iraq as a member of Mr. Bush's Foreign Intelligence Advisory Board................

Last month, Mr. Bush said he was concerned about Hunt's deal if it jeopardized Iraq's ability to pass a national oil-sharing law. In their letter to Hunt, Mr. Waxman and Mr. Kucinich asserted that Hunt's deal "may have undermined U.S. national policy of working toward the passage of an oil revenue sharing plan."

Iraqi Prime Minister Nouri al-Maliki's oil minister has called Hunt's deal illegal. Congressional Democrats have jumped into the fray, saying Hunt Oil signed its deal with the Kurdistan Regional Government because it has insider information about the future of Iraq's national oil law.

"Ray Hunt is in a unique position to know what is happening in Iraq," said Rep. Edward Markey, D-Mass., chairman of the Select Committee on Energy Independence and Global Warming.

Ms. Phillips said Hunt Oil's decision to enter Iraq was based only on information that "was in the public domain."


http://www.dallasnew...al.34d344b.html

The subsequent events still left an uneasy position for American companies to get too involved in KRG contracts

QUOTE
"House Government Oversight Committee Chairman Henry Waxman, D-Calif., citing the letters, meetings and e-mails between Hunt officials and U.S. diplomats, challenged Dr. Rice's assertion and asked Wednesday for all communications between the department and the Iraqi Oil Ministry.

"This is a serious matter because of the widespread suspicion in Iraq and other nations that the United States went to war to gain access to Iraqi oil," Mr. Waxman wrote.


http://www.dallasnew...n1.4d89b2b.html

Things have now moved on but Nick Turse's article in 2008 puts a useful slant on the bigger picture and Pentagons thirst for oil.

http://www.tomdispat...ntagon_fuels_up
Never stop questioning - Einstein

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#4 littledavesab

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Posted 27 June 2009 - 10:50 PM

Hey Riggers good to see you back, notice you hadnt made any posts for a while

Kurdistan is interesting but obviously high risk. Whether its as high risk as venezuela is a matter of opinon wink.gif However my guess is the risk reward bet is better in Kurdistan.

But have not the stocks already made their big moves?

Have you any thoughts on the other stans - Kazastan interests me

https://www.cia.gov/...ok/geos/KZ.html
- nice to know all that money the US spends on the CIA doesnt go to waste - its useful to us investors biggrin.gif biggrin.gif biggrin.gif

Kazakhstan, the largest of the former Soviet republics in territory, excluding Russia, possesses enormous fossil fuel reserves and plentiful supplies of other minerals and metals. It also has a large agricultural sector featuring livestock and grain. Kazakhstan's industrial sector rests on the extraction and processing of these natural resources. Kazakhstan enjoyed double-digit growth in 2000-01 and 8% or more per year in 2002-07 - thanks largely to its booming energy sector, but also to economic reform, good harvests, and increased foreign investment; growth slowed to 3% in 2008, however, as a result of declining oil prices and a softening world economy. Inflation reached 10% in 2007 and 18% in 2008. In the energy sector, the opening of the Caspian Pipeline Consortium in 2001, from western Kazakhstan's Tengiz oilfield to the Black Sea, substantially raised export capacity. In 2006 Kazakhstan completed the Atasu-Alashankou portion of an oil pipeline to China that is planned in future construction to extend from the country's Caspian coast eastward to the Chinese border. The country has embarked upon an industrial policy designed to diversify the economy away from overdependence on the oil sector by developing its manufacturing potential. The policy changed the corporate tax code to favor domestic industry as a means to reduce the influence of foreign investment and foreign personnel. The government has engaged in several disputes with foreign oil companies over the terms of production agreements, most recently, with regard to the Kashagan project in 2007-08. Since 2007, Astana has provided financial support to the banking sector which has been struggling with poor asset quality and large foreign loans.

Also Uzbekistan Turkmenistan etc

Inflation / Deflation ?? How about STAGFLATION everyone is right but everyone is wrong!
- (Update) Everyone wrong...... except Goldman Sachs apparently !!!!!!!

If you have an idea for podcast of the week post it here: http://www.greenener...pic=10990&st=40

#5 littledavesab

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Posted 27 June 2009 - 10:57 PM

this is a useful page - unfortunately as Kurdistan is not a separate country it just comes under Iraq.

I guess my thought is that the whole region is good geologically for minerals and oil, but some areas are less politically troubled than others

https://www.cia.gov/...gionCode=cas#UZ

Rank country (bbl) Date of Information



1 Saudi Arabia 266,800,000,000 1 January 2008 est.

2 Canada 178,600,000,000 1 January 2008 est.

3 Iran 138,400,000,000 1 January 2008 est.

4 Iraq 115,000,000,000 1 January 2008 est.

5 Kuwait 104,000,000,000 1 January 2008 est.

6 United Arab Emirates 97,800,000,000 1 January 2008 est.

7 Venezuela 87,040,000,000 1 January 2008 est.

8 Russia 79,000,000,000 1 January 2008 est.

9 Libya 41,460,000,000 1 January 2008 est.

10 Nigeria 36,220,000,000 1 January 2008 est.

11 Kazakhstan 30,000,000,000 1 January 2008 est.

12 United States 20,970,000,000 1 January 2008 est.

13 China 16,000,000,000 1 January 2008 est.

14 Qatar 15,210,000,000 1 January 2008 est.

15 Algeria 12,200,000,000 1 January 2008 est.

16 Brazil 12,180,000,000 1 January 2008 est.

17 Mexico 11,650,000,000 1 January 2008 est.

18 Angola 9,035,000,000 1 January 2008 est.

19 Azerbaijan 7,000,000,000 1 January 2008 est.

20 Norway 6,865,000,000 1 January 2008 est.

21 European Union 6,146,000,000 1 January 2008

22 India 5,625,000,000 1 January 2008 est.

23 Oman 5,500,000,000 1 January 2008 est.

24 Sudan 5,000,000,000 1 January 2008 est.

25 Ecuador 4,517,000,000 1 January 2008 est.

26 Malaysia 4,000,000,000 1 January 2008 est.

27 Indonesia 3,990,000,000 1 January 2007 est.

28 Egypt 3,700,000,000 1 January 2008 est.

29 United Kingdom 3,600,000,000 1 January 2008 est.

30 Yemen 3,000,000,000 1 January 2008 est.

31 Argentina 2,587,000,000 1 January 2008 est.

32 Syria 2,500,000,000 1 January 2008 est.

33 Gabon 2,000,000,000 1 January 2008 est.

34 Congo, Republic of the 1,600,000,000 1 January 2008 est.

35 Colombia 1,506,000,000 1 January 2008 est.

36 Australia 1,500,000,000 1 January 2008 est.

37 Chad 1,500,000,000 1 January 2008 est.

38 Denmark 1,188,000,000 1 January 2008 est.

39 Brunei 1,100,000,000 1 January 2008 est.

40 Equatorial Guinea 1,100,000,000 1 January 2008 est.

41 Peru 930,000,000 1 January 2008 est.

42 Trinidad and Tobago 728,300,000 1 January 2008 est.

43 Romania 600,000,000 1 January 2008 est.

44 Turkmenistan 600,000,000 1 January 2008 est.

45 Vietnam 600,000,000 1 January 2008 est.

46 Uzbekistan 594,000,000 1 January 2008 est.

47 Timor-Leste 553,800,000 1 January 2008

Actually when I look at this list, I had not realised China was that high up. Also if Venez could sort itself out, it would have a fine future
Inflation / Deflation ?? How about STAGFLATION everyone is right but everyone is wrong!
- (Update) Everyone wrong...... except Goldman Sachs apparently !!!!!!!

If you have an idea for podcast of the week post it here: http://www.greenener...pic=10990&st=40

#6 riggerbeautz

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Posted 28 June 2009 - 05:52 AM

QUOTE (littledavesab @ Jun 27 2009, 11:50 PM) <{POST_SNAPBACK}>
Hey Riggers good to see you back, notice you hadnt made any posts for a while

Kurdistan is interesting but obviously high risk. Whether its as high risk as venezuela is a matter of opinon wink.gif However my guess is the risk reward bet is better in Kurdistan.

But have not the stocks already made their big moves?

Have you any thoughts on the other stans - Kazastan interests me

Hi, still looked in, but it's summer and been busy outdoors.

Mainstream herd catching on and yes gains made on some. But blocks are yet to be truly developed or even allocated.

Some popular stocks already drifting= trading opportunities, i'm playing profits at the minute, but a lot more could follow. Been following this all year, now tyring to look at charts too, but i'm a useless chartist sad.gif

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Beware of MOOD HOOVERS they have a mission.

#7 riggerbeautz

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Posted 28 June 2009 - 07:22 PM

The players to date (taken from Seeking Alpha WZR story)


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#8 riggerbeautz

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Posted 28 June 2009 - 07:56 PM

Production success so far has been limited due to the inability in part to export to a wider market. But D.N.O were the first out the blocks on a limited level to local markets, but the lack of an export market slowed DNO up and caused much frustration, despite as they show in this capital markets presentation, being first out the blocks in all respects.

http://hugin.info/36...6041/248007.pdf

All the uncertainty as to the validity of claims and whether the likes of DNO would recieve payment look to be finally resolved for DNO with the central iraqi government has recently indicating a willingness to co-operate with payments via the finance ministry and the opening of a new pipeline through Turkey. (cynics would argue dollars talk in a country with a huge budget deficit no matter what the unfriendly iraqi oil minister and his cohorts might say...well currently, time will tell).

However the DNO went to great pains at an early stage to explain their position and have always maintained their legitimate claims to the PSC deal done with the KRG. As taken from their corporate website "The Tawke field was discovered by drilling of the exploration well, Tawke #1, which was completed in June 2006. This represented an important breakthrough in Northern Iraq as an oil discovery was confirmed by our very first exploration well within the area. Based on the positive result from this well and further successful delineation drilling, DNO has completed a fast-track field development. Test production from the Tawke field commenced in June 2007, marking another important milestone to DNO and our partner KRG."


Other more recent corporate presentations include:

Q1 presentation(including all operations) http://hugin.info/36...4111/305202.pdf

MERRILL LYNCH E&P CONFERENCE,LONDON, 20-22 APRIL 2009 http://hugin.info/36...6351/300268.pdf


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When you blame others you give up your power to change - Douglas Noel Adams

Beware of MOOD HOOVERS they have a mission.

#9 riggerbeautz

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Posted 05 July 2009 - 09:38 AM

Back on the larger plays Hoil/Hoc has already made big moves this year with oil finds and subsequently Tony Buckingham's "willingness" to sell a stake to a bigger partner.

See here for the Miran find: http://www.heritageo...l0gwmvzwivz.pdf

and areas of operations explained here http://www.heritageoilplc.com/iraq.cfm

Many will already know the media news story of the Genel Energy is typified below:

Tony Buckingham, the former mercenary, will become a FTSE 100 chief executive when Heritage Oil merges with Genel Energy, of Turkey, to create a Kurdish-focused oil explorer valued at £3.5 billion.

Mr Buckingham, the founder and chief executive of Heritage, said that the all-paper deal would take the form of a takeover of Genel, part of Turkey’s Cukorva Group.

Investors in Genel will be paid in shares and will own 50 per cent of the new company, which is to be called HeritaGE. The merger will create a company large enough to enter the FTSE 100.

http://business.time...icle6466154.ece

********************************************************************************
****

This seemed to focus attention on the area as up next comes the Addax takeover.

Addax of course have far bigger assets and operations around the world, but maybe the Kurdistan blocks were the added prize that Sinopec really wanted having seen others interest there.

See company website for details of blocks:

http://www.addaxpetr...e_area_overview and http://www.addaxpetr...untry_overview/

But note how Genel Energy has yet another slice here:

"In July 2005, Addax Petroleum entered into a farm-in agreement with Genel Enerji A.S. (Genel) for a 30% interest in a Production Sharing Agreement (PSA) for the Taq Taq field. Addax Petroleum subsequently increased its equity position in the Taq Taq field to 45% when it acquired an additional 15% participating interest, subject to Kurdistan Regional Government (KRG) back in rights, from Genel Enerji by way of Revised Production Sharing Agreement in November 2006. The Revised Production Sharing Agreement entered into by Addax Petroleum and Genel Enerji with the KRG also expanded the geographic scope of the original PSA to include the Kewa Chirmila prospect. The Production Sharing Agreement was revised again in February 2008 in order to conform to the model Production Sharing Agreement published by the KRG and gave the KRG the right to require that at a future date a government nominated entity is assigned a 20% interest, which would reduce Addax Petroleum’s interest to 36%"

http://www.addaxpetr...overview/taqtaq

So along comes this news of Sinopec's aquisition of Addax for $7.24billion with a reasonable explantion here

http://www.economist...ory_id=13917511

The real interesting part though is given all the huff and puff coming out of Baghdad about the validity of oil licenses signed by the KRG, the increased role of Genel Energy which gets the kudos of a FTSE listing and now China, it's going to be harder for the Iraqi oil ministry to argue their case. The KRG must be smiling at the emergence of such heavyweights seemingly in their corner now.

Somehow can't see the Iraqi government telling the Chineese their blocks are invalid wink.gif
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#10 riggerbeautz

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Posted 05 July 2009 - 10:02 AM

First up of the smaller plays is WZR as featured in the Seeking Alpha article.

Start with their blocks and agreements with the KRG where it can be seen they are in partnership with Talisman (TLM-T)

website confirmation http://www.westernza...ions/index.html

and their most recent corporate presentation http://www.westernza...une2009_000.pdf

They have already had one go and failed, but are underway at the second attempt, with expectations of hitting T.D in the autumn. If all goes well eventually they could naturally become an easy takeover target, maybe by Talisman themselves who knows. Joseph Schachter has been calling these up for some time as one of his hot picks, at an whole range of prices.

Talisman also due to report news soon which may be a fillip for the shares that have somewhat raced ahead of late.

Talismans quick interest on the story can be seen here.... "In June 2008, Talisman entered into agreements with the Kurdistan Regional Government within Iraq for interests in Blocks K44 and K39. Talisman has a 40% non-operated interest in Block K44. The first well of a three well commitment in Block K44 is currently being drilled with the results expected later in 2009. It is anticipated that a second well will be drilled in this block
in 2009.

Talisman also has a two-year seismic option agreement on Block K39, following which it has the option to enter into a PSC as operator of the block with a 60% working interest. Upon entering the exploration phase of the Block K39 PSC, Talisman will have a one well commitment in the first year.

Talisman expects that capital spending in 2009 in Kurdistan region of northern Iraq will be approximately $37 million."


http://www.talisman-...mp;disclaimer=1
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#11 riggerbeautz

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Posted 05 July 2009 - 11:11 AM

Next up i'll go with SEY only because of this interesting piece of news in the Times

From The Sunday Times July 4, 2009

Sterling Energy bidder met the Taliban Danny Fortson An Argentine oil tycoon who once courted the Taliban is the mystery bidder for Sterling Energy, the troubled oil group that is listed in London.

Carlos Bulgheroni, credited as the first western oil man into Turkmenistan through his family-owned company Bridas, is understood to have made an offer in the past few weeks. He is keen to take over the company to get a foothold in Iraqi Kurdistan, where big oil companies have begun to show major interest and Sterling holds an oil field licence.

Investors, including Irish billionaire Denis O’Brien, who owns 15%, and Invesco, which holds 29%, were unimpressed by the approach because it was below the company’s £50m market value. Talks continue.

Bulgheroni’s approach for the debt-laden group is opportunistic. Sterling announced last week that Harry Wilson, chief executive, was stepping down. An earlier deal to sell its US business to pay off debts fell through and a repayment waiver granted by the banks expires next month. Its shares have dropped 80% in the past year.

Dick Stabbins, the chairman, said last week that the “focus is on finding a resolution to our debt shortfall. . . we remain in discussions with interested third parties and seek a sale of assets”.

Bridas, founded by Bulgheroni’s father in 1948, is a partner with BP in Pan American Energy, one of South America’s largest independent oil groups. He was the first western oil man to bid successfully for gas and oil fields in Turkmenistan after the fall of the Soviet Union and struck up a friendship with the then president, Saparmyrat Nyazow.

After a major gas find there, he spent months in neighbouring Afghanistan, trekking across mountains and drinking tea with Taliban warlords as part of an effort to build a pipeline through the country to take the gas to Pakistan and India. US giant Unocal won the pipeline deal but it was later scrapped.

Bulgheroni covets Sterling, which also has prospects in Gabon, for its licence in the Sangaw oil field in Kurdistan, which it shares with Addax Petroleum. The latter was taken over by the Chinese state-owned oil group Sinopec last month, just days after a pipeline opened the region to oil exports for the first time.

http://business.time...icle6639027.ece

Pure journalistic speculation? Maybe, but as with others, it's always going to happen with an in play region.

SEY are cash strapped and need a serious shot in the arm one way or another. Yet they have big partners as can be seen on their website in Addax and KNOC with drilling due in the 4th quarter.

http://www.sterlinge.../kurdistan.aspx

Theres been other presentation to the likes of oilbarrel and the results can show the true financial plight, which can be viewed by those interested. But and it's a big BUT so i'll emphasise it again these really need finance to get anywhere near the finishing line and that makes them one of the highest risk gambles in the area.



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#12 riggerbeautz

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Posted 05 July 2009 - 12:18 PM

GKP also in the process of a drill, with endless "debate" on the likes of ADVFN for those interested.

Just prior to the drill this presentation was made at Oilbarrel http://www.gulfkeyst...onapril2009.pdf and more recentlyTodd Kozel, Executive Chairman of Gulf Keystone, commented:
"Although we are at an early stage in the drilling of this well, we are
encouraged by these shallow zone live oil shows and by the good progress our
drilling crew is making despite some difficult geological conditions. Subject to
what we encounter in the primary zones, we expect Shaikan-1 to reach target
depth in line with our planned schedule. "
.

This followed on from the corporate presentation made around the results.

http://www.gulfkeyst...ionjune2009.pdf

The shares have fallen back since initial excitement around the Heritage results and spud announcement, with the T.D report due in the 3rd quarter 2009


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#13 riggerbeautz

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Posted 05 July 2009 - 07:25 PM

Moving on to MOL linked to GKP by virtue of their stake in the Shaiken project as explained in their latest presentation which confirms them to be drilling and testing one exploration well in Akri Bijeel Block and one exploration well in Shaikan Block.

MOL also have links with Dana gas and are looking to develop the strategic partnership further. One look at MOL's investors and corporate website, shows these to be much more than a Kurdistan play. But no doubt if their venture with GKP comes good near term, it could possibly have an impact on their share price.

MOL trades on the Budapest stock exchange.

http://www.mol.hu/en...are_price_data/
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#14 riggerbeautz

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Posted 05 July 2009 - 08:01 PM

Vast Exploration and their partner Niko resources can be seen operating nearby to Heritage, so many a inference has been made that the prospects of them striking lucky based on Hoil's finds have been made.



As can be seen from their corporate website, although a Canadian oiler with producing fields, they are a strongly linked play on Kurdistan's giant oil field prospects given the size of the company. Seeking Alpha's article pointed out that larger partner Niko could easily take a bigger stake if not swallow them up in the long run.

http://www.vastexploration.com/

Their s.p has already risen 3 fold once this year, but at 0.42c has almost halved from this peak excitement. Although they spiked as high as the 1.30's last year, which shows how much further they could go on a mixture rumour and anticipation alone. Let alone striking oil. The fall was no doubt partly due to fresh funding acquired at 0.40c (410million).

Also linked into Vast is Longford energy as can be seen from the last operational update
QUOTE
"Vast Exploration Inc. ("Vast" or the "Company") (TSX VENTURE:VST) is pleased to announce that the consortium has completed the acquisition of its 2D seismic program over the surface structure that dominates the Qara Dagh block.

The 355 kilometer program was completed successfully using a combination of vibrator and dynamite sources. Processing has commenced and interpretation will follow once final processed sections are received. Interpretation of the data is expected to resolve the sub-surface structural model and identify potential reservoir sections leading to the selection of a drilling location. The first drilling location is expected to be identified by the end of the third quarter of 2009.

Ahmed Said, President and Chief Executive Officer of the Company stated, "While the exploration program on the Qara Dagh block is at an early stage, we are excited by the results obtained to date on the seismic program on Qara Dagh block and the recent successes in neighboring blocks. We look forward to the next phase of our program, including completing the data interpretation upon completion of the processing phase."

In addition, the Company announces that it has entered into a loan agreement with Longford Energy Inc. ("Longford"), whereby the Company has agreed to lend Longford US$4,600,000 (the "Loan"). Longford intends to use the proceeds of the Loan for general working capital purposes and for the pursuit of, and satisfaction of financial commitments in respect of an interest in a production sharing contract for the exploration, development and production of hydrocarbon resources.

The principal under the Loan will incur interest at a rate of 12% per year and shall be secured against certain of the assets of Longford and shall mature on December 25, 2009. Longford intends to repay the Loan upon completion of its previously announced private placement financing (See Longford Press Release dated June 18, 2009).

Longford and Vast have common officers and directors, being Stan Bharti and Ahmed Said, who are directors of Longford and Vast; and Gary Lobb and Patrick Gleeson, the Chief Financial Officer and Corporate Secretary, respectively of both Longford and Vast. In addition, Ahmed Said is the President and Chief Executive Officer of both Longford and Vast. As such the loan will be considered a non-arm's length transaction for the purposes of the TSX Venture Exchange.


http://www.longfordenergyinc.com/

Yet another listed on the TSX-V see website above for further details of operations.
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#15 riggerbeautz

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Posted 06 July 2009 - 08:04 PM

O.M.V one of the bigger listed players got their stakes in the form of 2 blocks late 2007 as can be seen on the KRG time-line of events posted earlier.

Austria based and the website demonstrates the sca;e of their operations

http://www.omv.com/portal/01/com

More recently this news came out of their partnership with Dana and Crescent

"OMV has successfully expanded its E&P portfolio in the Middle East by signing an agreement with the sellers Crescent Petroleum Company International and Dana Gas PJSC to acquire a 10% share in Pearl Petroleum Company Limited, a company which is set-up to appraise, develop, and produce the world class multi TCF (trillion cubic feet) Khor Mor and Chemchemal gas fields in the Kurdistan Region of Iraq. OMV has made an initial payment of USD 350 mn. Contingent payments may be made depending on further reserves determinations."

This followed yet another piece of political "football" as Iraq revoked the gas transport license and declared the KRG deal illegal.

http://www.austriant...ex.php?id=13334

Something tells me that story is not done.

http://www.rigzone.c....asp?a_id=76236
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#16 riggerbeautz

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Posted 07 July 2009 - 11:14 AM

Everyone seems to be jumping on this story now, the latest oilbarrel

http://www.oilbarrel...ovince/860.html

Although some would take issue with "Baghdad still deems all contracts signed by the Kurdistan Regional Government (KRG) and foreign oil companies as illegal, insisting that only it can do deals". As Iarq central had seemingly reluctantly agreed contracts drawn up prior to their own oil legislation being drawn up would be valid?


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#17 riggerbeautz

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Posted 07 July 2009 - 07:34 PM

Reliance industries listed in India has PSC's that cover petroleum exploration activities in the ‘Rovi’ and ‘Sarta’ blocks in the Kurdistan region of Iraq. Whilst it may benefit from any huge developments there, it's share price is more likely governed by it's larger domestic portfolio. Although according to it's website it does have 11 oversea exploration blocks on its books.

Maybe worth watching though for news of any developments on these blocks that could be hyped as transforming!

http://www.ril.com/h...us/aboutus.html

Perrenco are a private group of French origin with operations throughout the world. As yet their activity in Iraq is low key but they were awarded the Sindi/Amedi Block (2,358 square kilometres) along the Iraq/Turkish border back in 2007.

http://www.perenco.c...om the CEO.html

HKN energy is really Hillwood international a sub division of the Hillwood Perot group, chaired by Ross Perot. Again these were awarded their blocks in late 2007. Perhaps worth a watch on the news front though as other than seismics little movement by comparison to others so far.

http://www.hillwoode...67/Default.aspx

Norbest oil is really the big boys of TNK/BP working in harmonic partnership no doubt laugh.gif

Norbest was awarded a PSC for the Hawler Area in Kurdistan Region on November 10, 2007. Hawler Area is located in the vicinity of Erbil covers an area of 1532 sq.km.

Norbest late 2008 put out tenders for drilling contractors on the following basis of 2 firm and 3 optional wells to be drilled in the 3rd quarter of 2009.

http://norbestoil.com/project/

KNOC is the south Korean major that has courted controvesy with Baghdad after signing a PSC with the KRG for stakes of between stakes of 15 to 20% in 6 fields including the Bazian block in the Kurdish region.

Unfortunately for KNOC and its partner SK Energy, it has prevented them being included in the so called latest bidding rounds elsewhere in Iraq. KNOC have seemingly remained unrepentant in these political games.




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#18 No6

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Posted 07 July 2009 - 08:18 PM

Good thread. Lot of reading to catch up on. I'm only really familiar with HOIL and that can be very volatile, especially at the moment.

#19 riggerbeautz

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Posted 08 July 2009 - 06:22 AM

QUOTE (No6 @ Jul 7 2009, 09:18 PM) <{POST_SNAPBACK}>
Good thread. Lot of reading to catch up on. I'm only really familiar with HOIL and that can be very volatile, especially at the moment.


Thanks, i should be basking in glory of certain plays, but never had time to post all up; so much stuff collected on file last few months i thought what a good place to store laugh.gif and maybe help others of course if interested.

All are volatile to some extent, the fact it's Kurdistan tells the risk factor. But Hoil is de-risked somewhat by Algerian asset's. Zengas over at ADVFN provides a good handle on valuations, but i'm playing the general theme. Hoil can be ISA'd and the bard we love led me in with his 3rd play late March, my only regret is not taking profits on the G.E spike to above £6.00.

Was already in GKP a month earlier when picked up several comments about an overhang clearing at 5.5p and it did, sold all a little late after bit of a drop at 15.5p. So about my best play, but currently trying to be smart and time buying a few more on fallback as drill news due around end of 3rd quarter.

Then i started researching the area and WZR was a quick choice at a bombed out 0.65c has it already had hit a duster. Took 80% out at 2.02 expecting a fallback there too. Surprised me so far with resistance and i'm trying to time buying a good chunk back again. On the back of this traded VST during May at 0.44c but having soared into the early 60c range the placement at 0.40c caused a rapid fallback and i bailed at 0.47 hardly worth it i know, but feared it was heading to placement price. LFD similar bought at 0.44c during May sold out too soon at 0.52c.

So i'm learning to trade the area and voatility, though my plays have been too big at times, which has influenced my decisions; luckily maybe i've made good profits. Either way i don't think the theme is over yet by a long way and the fallbacks are hopefully going to present opportunities.

My regret was not being able to trade DNO since i called it right in my mind, but didn't find anywhere to trade it when i wanted to sad.gif
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#20 riggerbeautz

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Posted 19 July 2009 - 07:02 PM

QUOTE (riggerbeautz @ Jul 5 2009, 10:38 AM) <{POST_SNAPBACK}>
Back on the larger plays Hoil/Hoc has already made big moves this year with oil finds and subsequently Tony Buckingham's "willingness" to sell a stake to a bigger partner.


Moving swiftly on could pick any of several stories on Shell's interest last week, so i'll settle with the simple version in the Express today

QUOTE
THE flow of takeover tales from the oil exploration sector continued yesterday as speculators bought into Heritage Oil on hopes for a bid from Shell.

Shares in FTSE 250 company Heritage, which has assets in Kurdistan and Uganda, were pumped up 50¼p to 490¼p as ­gossips heard talk of a 700p-a-share offer in the pipeline, valuing it at nearly £2 billion. Shell was 3p slicker at 1466p.

Only last month, Heritage agreed to buy Turkey’s Genel Energy ­International to create a £3 billion company. This followed news of a major oil discovery by Heritage in Kurdistan.


http://www.express.c...-Shell-bid-talk


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